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$1b for new African startups

Agencies/Nairobi
Filed on July 26, 2015 | Last updated on July 26, 2015 at 08.34 am
$1b for new African startups
US President Barack Obama delivers remarks at the Global Entrepreneurship Summit in Nairobi on Saturday.

(Reuters)

Obama says entrepreneurs in Africa can give hope and deliver growth.

President Barack Obama called on African leaders to embrace women and youth entrepreneurs as well as anti-corruption initiatives, and asked US investors to reward those efforts, as he announced more than $1 billion in new private and US government commitments for startups.

"Entrepreneurship means ownership and self determination as opposed to being simply dependent on somebody else," the U.S. president said Saturday in an address to the sixth Global Entrepreneurship Summit in Kenya's capital, Nairobi.

"I wanted to be here because Africa is on the move," Obama said.

"This continent needs to be a future hub of global growth not just African growth."

Obama is keen to boost business ties with Africa, where China overtook the United States as the continent's biggest trade partner in 2009. He praised Kenya as the largest economy in East Africa and a technology hub.

"Africa is on the move. Africa is one of the fastest growing regions in the world," Obama told the conference, where he was greeted by applause when he began with the words "Jambo", the Swahili for "hello". "It is wonderful to be back in Kenya.

"Entrepreneurship offers a positive alternative to the ideologies of violence and division that can all too often fill the void when young people don't see a future for themselves."

'Open for business'

An array of technology and other companies have started up in recent years in Africa in a bid to shift the continent away from a traditional focus of commodity exports, but entrepreneurs often complain they cannot find affordable capital.

"Africa is open for business," Kenyan President Uhuru Kenyatta said in his speech to open the entrepreneurship conference. "It is the time for a new generation of Africans to promote inclusive prosperity."

Kenya's economy is expected to grow by about six per cent this year. The economy of Ethiopia, Obama's next stop, is forecast to expand by more than 10 per cent, although right groups say Addis Ababa's economic achievements are at the expense of free speech.

The annual US-sponsored conference was being held for the first time in sub-Saharan Africa at a UN compound in Nairobi.

The US president arrived on Friday in Kenya as part of an East African visit that includes a stop in Ethiopia. He's being accompanied by a delegation of 20 US lawmakers. The selection of Kenya to host the summit highlights the nation's status as a technology and entrepreneurship hub in Africa, White House National Security Adviser Susan Rice said in advance of the event.

The Overseas Private Investment Corporation announced plans to support as much as $200 million for Equity Bank Group foreign currency lending of $450 million over five years, focusing on projects by young people and women.

Positive impact

OPIC also agreed to explore financing of $100 million for a Goldman Sachs women's entrepreneurs programme, the White House said in a statement coinciding with the summit. A two-year, $50 million pilot project by OPIC will also back small companies that have a positive social impact

Obama also announced the opening of a third US-backed African women's entrepreneurial center, in Mali, later this year. The other two centers are in Zambia and Kenya.

Obama's participation seeks to advance trade and investment in Africa. US programs to expand African access to electricity, food and healthcare, empower young leaders and reduce corruption are aimed at emphasizing development above aid, and fostering African economic growth that can increase demand for US exports and increase investment by US businesses.

Aly-Khan Satchu, chief executive officer of Nairobi-based Rich Management, said he expects a "positive economic spillover effect" from Obama's visit.

"This is a major geopolitical power play by the US to take a leadership position in this region," he said by e-mail. - Agencies





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